Four years ago, my husband Kelly and I got completely out of debt.

It was heavenly, and we have stayed completely out of debt since. No mortgage, credit cards paid off monthly.

We chose to sell our earthbag home in Colorado to become debt-free, and that was not an easy decision to make. I don’t know if we would have sold it if the Byers hadn’t come along. No, that is not a misspelling. While we were dithering about to sell or not to sell, I mentioned to some people we knew, the Byers, that we were considering selling. When they made us an offer a few days later,  their last name seemed like a message from above!

But that’s really beside the point, just a story I like to tell. The point here is that getting out of debt is an absolutely terrific goal.

How could you do it? For most people, it will be the same way the ants ate the elephant… one bite at a time.

But first, do you know how much debt you have? While making a list can be depressing, that list also reflects your current reality. If you are able to use a spreadsheet, that is a good way to keep track, and then you can see your progress.

On that list, organize the items by what the interest rates are. Credit card balances can sometimes have the interest greatly reduced by doing a balance transfer from one company you have a card with to another, but do your homework to be sure that there are no hidden fees.

By the way, pay your credit cards bills on time, or the companies can raise your interest rates.

Then… how are you going to reduce that debt? Certainly in some situations, people really can’t at that time. But let’s assume you have enough income to cover your basic expenses or more.

What you are going to have to do has two parts:

[1] Spend less, maybe a LOT less. Use websites like mine to get ideas for how to live more simply and frugally. Go out to eat rarely. Buy less junk food and fewer coffees out. Cut w-a-y back on holiday giving and make some of those gifts. Stay out of the stores. Buy second hand clothes, or mend things you have, or just make do with what is in your closet now.

Spending less is not easy, because of the psychology of buying. If you are trapped at times in consumerism, you have lots of company. Be kind to yourself, but that doesn’t mean buying that $100 pair of shoes that will increase your debt.

Kelly and I keep track of every purchase in a notebook. We’ve done it for years, and we run totals at the end of the month. We use a little date book for the job. If you do that, you will probably see places you can save more.

[2] Choose one of your bills, let’s say a credit card bill, to pay off. Put as much extra as you can on it each month, or even make an extra payment during the month if you have the money.  It’s a good idea to pay down the one that has the highest interest rate, but it’s also so encouraging to get one really paid off, that you might rather start with your smallest one and see how fast you can get rid of it.

Of course, both of the steps do need you to not  be adding more debt!

Here’s a good book on becoming mortgage free.  It helped us decide to make our change, and we love having so much more freedom in our daily lives to do whatever matters to us.